The Hiring Conundrum : Promote vs. Recruit

Jason
April 19, 2022

The business is going gangbusters.

The team is starting to creak under increasing pressure.

The CEO is demanding quick hires to plug the gaps.

What to do?

Recruit internally and know what you’re getting or, hire externally to find the right expertise but potentially disrupt team cohesion?

Internal Promotion

If you’re growing quickly, you will almost certainly be recruiting externally so then the question is, how do you decide which roles and which individuals can be handled internally and which require external hires?

The immediate challenge is whether you have sufficient quality within the team to promote internally for a particular role?

Being able to identity and promote the right team members is a business critical skill for any senior manager but in particular, for technology managers where people are often promoted as much for their incumbency, as their skills.

The challenge to confront with internal recruitment is to establish if their skills as team player, can translate to that of team leader, even with a small team.  

This is a regular issue for fast growth companies to grapple with and isn’t just about employees, founders often find themselves grappling with growth and finding themselves often out of their depth,though not always acknowledging the fact.  The CEO or CTO who was highly effective as founder, might not have the skills required to scale that company. It might be a reason that growth stalls and/or investment dries up.

These issues are why you need to invest time and training in helping any emerging stars to build out their skill set, even and alongside the business expanding at pace.  It’s also why, difficult conversations often need to take place when tough recruitment decisions are required.

If you want to read an entertaining description about how one high profile tech company dealt (or didn’t deal) with this issue, grab a copy of ‘Disrupted : Misadventures of a start up’ as author Dan Lyons describes his often chaotic employment with Hubspot.

Another issue that can emerge within larger companies who over promote, is something called ‘The Peter Principle’, a concept that observes the situation in a hierarchy where people often rise to their “level of incompetence” – not good for company performance or subordinate morale.

Table 1 :  Internal Promotion

GoodBad
Lower costs to recruitDon’t have skills
Faster ramp upTraining required
Reduced risk of bad fitManagers proprietorial about talent
Reduced time to fill roleLack of diversity
Inspires others in the team to striveThe Peter Principle
Data significantly favours internal vs external

External Hires

The alternative then is, go hire.  Unavoidable as you grow.

Recruiting is rarely a fun but is often critical and so, founder CEOs and CTOs often stay very close to the recruitment process. They have built the ethos of their company, been directly involved in the early hires and are acutely aware that good hires can transform but, bad hires will disrupt.

It needs to be a decent sized business before founders and/or senior managers relinquish close control of the recruitment process and authorise HR teams and/or external recruiters to do the sifting.

That said, the benefits of external hires are significant.

It enables you to recruit ‘oven ready’ talent and if you’re a business that is flying, potentially those recruits can bring with them some heavy weight insight and expertise.  

Bringing in new faces will also freshen up the team, the conversations and introduce greater diversity.  Founders and early employees are often cut from similar cloth, but the need to recruit creates opportunities to diversify and there is significant empirical evidence to suggest that diversity drives better performance.

Another reason to hire instead of promote is if complacency has settled into the team and new blood will shake things up and drive improvements.

What is important is to streamline the process and treat all applicants with respect and courtesy (a feature that is lacking with many companies and will create a positive impact about your business for candidates and employees alike).

– Be very specific with your job specification

– Set clear timelines and communicate to all candidates

– Agree an internal process for reviewing the CVs and matching vs. criteria

– Create an initial shortlist and arrange introductory calls

– Ensure all candidates are providing with the courtesy of a reply – even if rejected.  

[An automated reply should not be beyond your technical capabilities and it’s outrageous that many companies fail to abide by these simple courtesies]

– Understand where an individual candidate can bring value, make your offer, give yourself some slack to increase if necessary

– Don’t recruit because you think you have too.  If no candidates fit the role, do not hire. Painful as it might seem at the time, have this simple rule … “If in any doubt, there is no doubt”

– Build a repository of onboarding videos and content, to help the transition phase

– Understand that it might take some time [3 months is often a good barometer] for that new employee to truly find their feet

How to find talent

What is the most effective route to finding talent?

Can you do it independently or do you have to use a recruiter?

The latter is clearly a significant cost but might be able to unearth and/or headhunt an individual who might not have been in the job market.   If you decide to go via the recruiter process then try to ensure that any fees are based on success. Make your fees contingent on the placement being a success and ensure you build in sufficient post employment time for a clear eyed review to take place.

The far cheaper but more time consuming alternative is to post your role independently across DIY job sites – MonsterIndeedZip RecruiterAngel List being amongst the largest.

Using these sites will require you to adopt a rigorous internal hiring process but could save you a significant amount of cash and will also enable you to see all the candidates, rather than the ones chosen by third parties.

Outsource the Role

If you can’t promote from within nor find an appropriate external hire, consider short term freelancers.  The world is awash with brilliant freelancers able to drop in at very short notice and help plug a gap.

Airtasker is a services marketplace/freelancing platform that freelancers can use to find work that can earn them a quick buck. They can help people find skilled individuals who can complete whatever task they need to get done at the moment.

Sites like UpworkFreelancerPeople Per Hour allow you to find everything from an accountant to a front end developer but all these selection from these sites require a rigorous process for the right match.

Table 2 :  External Recruitment

GoodBad
Broader talent poolIncreased hiring cost
More diversityLonger lead time [risk of extended timeframe]
Industry / company experienceLonger learning curve
Necessary to cope with growth

Conclusion

Truth (backed up by empirical evidence) is that it’s a much safer bet to recruit from within but there is a skill in timing.

I’ve managed from an early stage in my career on the basis that it’s good to promote (or encourage promotion) before the person realises or asks.   It keeps them motivated and encouraged to strive for personal and collective success.

If they come to you, then they have probably thought about it for a while before building up the courage. It becomes more of an ultimatum as if you say no or try to delay then they will almost certainly move on.

This happened to me when I was working in a consultancy where my boss resigned and despite being young, I asked to take his place.   That was rejected and despite being offered the role two months later, their failure to understand and manage my ambition led to some disillusionment about the company as a whole.  You can tell it still rankles!!

Maybe there is someone in the team that can fill a particular role, but they lack the skills, confidence or ambition?

Consider nurturing that talent ahead of them appreciating it themselves.  Consider nudging them towards a management course and taking some time away from the coalface, giving them confidence and enabling them to take that step up in responsibility.  

Managing and building a team is perhaps the greatest of all challenges for senior managers.  

You need to be pro-active in spotting talent, heading off gaps and managing a disciplined recruitment process.

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